A3403

An Act limiting imposition of certain fee increases by a residential landlord, supplementing chapter 18 of Title 2A of the New Jersey Statutes, and amending P.L.1974, c.49.

Be It Enacted by the Senate and General Assembly of the State of New Jersey:

1. (New section) a. As used in this section:

"Recurring fee" means all fees and costs chargeable to a residential tenant pursuant to or supplementing a lease, which are not included in the base rent. A "recurring fee" shall include, but shall not be limited to, fees for amenities, pets, parking, convenience charges, charges incorporated into the costs of paying the monthly rent such as credit card fees, or other similar costs chargeable on a recurring basis, or related to charges that occur on a recurring basis, to a tenant.

b. A landlord shall not, over the course of a 12-month period, increase the recurring fees, whether severally or in the aggregate, on a rental unit by more than 10 percent over the amount charged during the preceding 12-month period.

c. A tenant shall not enter into a sublease that results in an increase in recurring fees for the rental unit that exceeds the allowable rate authorized by subsection b. of this section. Nothing in this subsection shall be construed to authorize a tenant to sublet or assign the tenant’s interest where otherwise prohibited.

d. A landlord may, notwithstanding subsection b. of this section, establish the initial recurring fee rate for a new tenancy in which no tenant from the preceding tenancy remains in lawful possession of the rental unit. Subsection b. of this section shall only apply to subsequent increases after that initial recurring fee rate has been established with respect to the new tenancy.

e. A landlord that requests or accepts an increase in recurring fees, in violation of, and exceeding the amount authorized pursuant to, subsection b. of this section shall be subject to the following:

(1) The maximum amount of recurring fees chargeable to the tenant for the duration of the present lease or agreement term, or subsequent lease or agreement term if the present term is month-to-month, shall be the recurring fee for the rental term preceding the increase in violation of subsection b. of this section.

(2) The landlord shall be liable for a penalty of $1,000 per violation per unit. The penalty shall be collected and enforced by summary proceedings pursuant to the "Penalty Enforcement Law of 1999," P.L.1999, c.274 (C.2A:58-10 et seq.). The Superior Court, Law Division, Special Civil Part in the county in which the residential rental property is located shall have jurisdiction over the proceedings described pursuant to this paragraph. Process shall be in the nature of a summons or warrant, and shall issue upon the complaint of the Commissioner of Community Affairs or the Attorney General.

(3) A tenant shall have the right to petition a court of competent jurisdiction to terminate a lease or agreement between the landlord and tenant, which shall terminate all obligations under the lease, and shall be permitted to recover reasonable attorney’s fees or expenses.

(4) The landlord shall, at the discretion of the tenant, be subject to a separate cause of action by the tenant in the Superior Court, Law Division, Special Civil Part in the county in which the rental unit is located. A tenant may recover $1,000 from the landlord, in addition to reasonable attorney’s fees or expenses, court costs, expenses for expert witnesses, and other expenses incurred in proving a violation of P.L. , c. (C. ) (pending before the Legislature as this bill).

(5) The landlord shall be subject to the penalties set forth in this subsection for each violation against each tenant. The imposition of a penalty pursuant to any paragraph of this subsection shall not prevent the imposition of a penalty pursuant to a different paragraph of this subsection or any other provision of law, including the New Jersey consumer fraud act, P.L.1960, c.39 (C.56:8-1 et seq.).

f. P.L. , c. (C. ) (pending before the Legislature as this bill):

(1) shall function in addition to, and not in place of, the existing prohibition on unconscionable rent increases pursuant to subsection f. of section 2 of P.L.1974, c.49 (C.2A:18-61.1);

(2) shall not be construed to prohibit or otherwise impair a landlord’s ability to commence an eviction action pursuant to section 2 of P.L.1974, c.49 (C.2A:18-61.1);

(3) shall not, except to the extent provided by subsection b. of this section, be construed to interfere with or impede a lease agreement between a landlord and tenant for which recurring fees are characterized as rent or additional rent; and

(4) shall only function, notwithstanding any provision of a lease agreement between a landlord and tenant, for which recurring fees are characterized as rent or additional rent, to the contrary, to limit the ability of a landlord to increase the amount of recurring fees beyond the authorized amount set forth in subsection b. of this section.

2. Section 2 of P.L.1974, c.49 (C.2A:18-61.1) is amended to read as follows:

2. No lessee or tenant or the assigns, under-tenants or legal representatives of such lessee or tenant may be removed by the Superior Court from any house, building, mobile home or land in a mobile home park or tenement leased for residential purposes, other than (1) owner-occupied premises with not more than two rental units or a hotel, motel or other guest house or part thereof rented to a transient guest or seasonal tenant; (2) a dwelling unit which is held in trust on behalf of a member of the immediate family of the person or persons establishing the trust, provided that the member of the immediate family on whose behalf the trust is established permanently occupies the unit; and (3) a dwelling unit which is permanently occupied by a member of the immediate family of the owner of that unit, provided, however, that exception (2) or (3) shall apply only in cases in which the member of the immediate family has a developmental disability, except upon establishment of one of the following grounds as good cause:

a. The person fails to pay rent due and owing under the lease whether the same be oral or written; provided that, for the purposes of this section, any portion of rent unpaid by a tenant to a landlord but utilized by the tenant to continue utility service to the rental premises after receiving notice from an electric, gas, water or sewer public utility that such service was in danger of discontinuance based on nonpayment by the landlord, shall not be deemed to be unpaid rent.

b. The person has continued to be, after written notice to cease, so disorderly as to destroy the peace and quiet of the occupants or other tenants living in said house or neighborhood.

c. The person has willfully or by reason of gross negligence caused or allowed destruction, damage or injury to the premises.

d. The person has continued, after written notice to cease, to substantially violate or breach any of the landlord's rules and regulations governing said premises, provided such rules and regulations are reasonable and have been accepted in writing by the tenant or made a part of the lease at the beginning of the lease term.

e. (1) The person has continued, after written notice to cease, to substantially violate or breach any of the covenants or agreements contained in the lease for the premises where a right of reentry is reserved to the landlord in the lease for a violation of such covenant or agreement, provided that such covenant or agreement is reasonable and was contained in the lease at the beginning of the lease term.

(2) In public housing under the control of a public housing authority or redevelopment agency, the person has substantially violated or breached any of the covenants or agreements contained in the lease for the premises pertaining to illegal uses of controlled dangerous substances, or other illegal activities, whether or not a right of reentry is reserved to the landlord in the lease for a violation of such covenant or agreement, provided that such covenant or agreement conforms to federal guidelines regarding such lease provisions and was contained in the lease at the beginning of the lease term.

f. (1) The person has failed to pay rent after a valid notice to quit and notice of increase of said rent, provided the increase in rent is not unconscionable and complies with any and all other laws or municipal ordinances governing rent increases.

(2) An unconscionable rent increase for the purposes of this section shall include, but shall not be limited to, an increase in recurring fees that violates a provision of subsection b. of section 1 of P.L. , c. (C. ) (pending before the Legislature as this bill), whether jointly as included in the base rent, or independently based upon recurring fees alone, notwithstanding an increase in base rent that may not otherwise satisfy the requirements of unconscionability.

(3) Paragraph (2) of this subsection shall supplement existing statutory requirements and judicial construction of this subsection, and shall not be construed to interfere with, affect, or in any way impede, a tenant’s remedies set forth in any other provision of law.

g. The landlord or owner (1) seeks to permanently board up or demolish the premises because he has been cited by local or State housing inspectors for substantial violations affecting the health and safety of tenants and it is economically unfeasible for the owner to eliminate the violations; (2) seeks to comply with local or State housing inspectors who have cited him for substantial violations affecting the health and safety of tenants and it is unfeasible to so comply without removing the tenant; simultaneously with service of notice of eviction pursuant to this clause, the landlord shall notify the Department of Community Affairs of the intention to institute proceedings and shall provide the department with such other information as it may require pursuant to rules and regulations. The department shall inform all parties and the court of its view with respect to the feasibility of compliance without removal of the tenant and may in its discretion appear and present evidence; (3) seeks to correct an illegal occupancy because he has been cited by local or State housing inspectors or zoning officers and it is unfeasible to correct such illegal occupancy without removing the tenant; or (4) is a governmental agency which seeks to permanently retire the premises from the rental market pursuant to a redevelopment or land clearance plan in a blighted area. In those cases where the tenant is being removed for any reason specified in this subsection, no warrant for possession shall be issued until P.L.1967, c.79 (C.52:31B-1 et seq.) and P.L.1971, c.362 (C.20:4-1 et seq.) have been complied with.

h. The owner seeks to retire permanently the residential building or the mobile home park from residential use or use as a mobile home park, provided this subsection shall not apply to circumstances covered under subsection g. of this section.

i. The landlord or owner proposes, at the termination of a lease, reasonable changes of substance in the terms and conditions of the lease, including specifically any change in the term thereof, which the tenant, after written notice, refuses to accept; provided that in cases where a tenant has received a notice of termination pursuant to subsection g. of section 3 of P.L.1974, c.49 (C.2A:18-61.2), or has a protected tenancy status pursuant to the "Senior Citizens and Disabled Protected Tenancy Act," P.L.1981, c.226 (C.2A:18-61.22 et al.), or pursuant to the "Tenant Protection Act of 1992," P.L.1991, c.509 (C.2A:18-61.40 et al.), the landlord or owner shall have the burden of proving that any change in the terms and conditions of the lease, rental or regulations both is reasonable and does not substantially reduce the rights and privileges to which the tenant was entitled prior to the conversion.

j. The person, after written notice to cease, has habitually and without legal justification failed to pay rent which is due and owing.

k. The landlord or owner of the building or mobile home park is converting from the rental market to a condominium, cooperative or fee simple ownership of two or more dwelling units or park sites, except as hereinafter provided in subsection l. of this section. Where the tenant is being removed pursuant to this subsection, no warrant for possession shall be issued until this act has been complied with. No action for possession shall be brought pursuant to this subsection against a senior citizen tenant or disabled tenant with protected tenancy status pursuant to the "Senior Citizens and Disabled Protected Tenancy Act," P.L.1981, c.226 (C.2A:18-61.22 et al.), or against a qualified tenant under the "Tenant Protection Act of 1992," P.L.1991, c.509 (C.2A:18-61.40 et al.), as long as the agency has not terminated the protected tenancy status or the protected tenancy period has not expired.

l. (1) The owner of a building or mobile home park, which is constructed as or being converted to a condominium, cooperative or fee simple ownership, seeks to evict a tenant or sublessee whose initial tenancy began after the master deed, agreement establishing the cooperative or subdivision plat was recorded, because the owner has contracted to sell the unit to a buyer who seeks to personally occupy it and the contract for sale calls for the unit to be vacant at the time of closing. However, no action shall be brought against a tenant under paragraph (1) of this subsection unless the tenant was given a statement in accordance with section 6 of P.L.1975, c.311 (C.2A:18-61.9);

(2) The owner of three or less condominium or cooperative units seeks to evict a tenant whose initial tenancy began by rental from an owner of three or less units after the master deed or agreement establishing the cooperative was recorded, because the owner seeks to personally occupy the unit, or has contracted to sell the unit to a buyer who seeks to personally occupy it and the contract for sale calls for the unit to be vacant at the time of closing;

(3) The owner of a building of three residential units or less seeks to personally occupy a unit, or has contracted to sell the residential unit to a buyer who wishes to personally occupy it and the contract for sale calls for the unit to be vacant at the time of closing.

m. The landlord or owner conditioned the tenancy upon and in consideration for the tenant's employment by the landlord or owner as superintendent, janitor or in some other capacity and such employment is being terminated.

n. The person has been convicted of or pleaded guilty to, or if a juvenile, has been adjudicated delinquent on the basis of an act which if committed by an adult would constitute an offense under the "Comprehensive Drug Reform Act of 1987," N.J.S.2C:35-1 et al., involving the use, possession, manufacture, dispensing or distribution of a controlled dangerous substance, controlled dangerous substance analog or drug paraphernalia within the meaning of that act within or upon the leased premises or the building or complex of buildings and land appurtenant thereto, or the mobile home park, in which those premises are located, and has not in connection with his sentence for that offense either (1) successfully completed or (2) been admitted to and continued upon probation while completing, a drug rehabilitation program pursuant to N.J.S.2C:35-14; or, being the tenant or lessee of such leased premises, knowingly harbors or harbored therein a person who has been so convicted or has so pleaded, or otherwise permits or permitted such a person to occupy those premises for residential purposes, whether continuously or intermittently, except that this subsection shall not apply to a person harboring or permitting a juvenile to occupy the premises if the juvenile has been adjudicated delinquent upon the basis of an act which if committed by an adult would constitute the offense of use or possession under the said act. No action for removal may be brought pursuant to this subsection more than two years after the date of the adjudication or conviction or more than two years after the person's release from incarceration whichever is the later.

o. The person has been convicted of or pleaded guilty to, or if a juvenile, has been adjudicated delinquent on the basis of an act which if committed by an adult would constitute an offense under N.J.S.2C:12-1 or N.J.S.2C:12-3 involving assault, or terroristic threats against the landlord, a member of the landlord's family or an employee of the landlord; or, being the tenant or lessee of such leased premises, knowingly harbors or harbored therein a person who has been so convicted or has so pleaded, or otherwise permits or permitted such a person to occupy those premises for residential purposes, whether continuously or intermittently. No action for removal may be brought pursuant to this subsection more than two years after the adjudication or conviction or more than two years after the person's release from incarceration whichever is the later.

p. The person has been found, by a preponderance of the evidence, liable in a civil action for removal commenced under this act for an offense under N.J.S.2C:20-1 et al. involving theft of property located on the leased premises from the landlord, the leased premises or other tenants residing in the leased premises, or N.J.S.2C:12-1 or N.J.S.2C:12-3 involving assault or terroristic threats against the landlord, a member of the landlord's family or an employee of the landlord, or under the "Comprehensive Drug Reform Act of 1987," N.J.S.2C:35-1 et al., involving the use, possession, manufacture, dispensing or distribution of a controlled dangerous substance, controlled dangerous substance analog or drug paraphernalia within the meaning of that act within or upon the leased premises or the building or complex of buildings and land appurtenant thereto, or the mobile home park, in which those premises are located, and has not in connection with his sentence for that offense either (1) successfully completed or (2) been admitted to and continued upon probation while completing a drug rehabilitation program pursuant to N.J.S.2C:35-14; or, being the tenant or lessee of such leased premises, knowingly harbors or harbored therein a person who committed such an offense, or otherwise permits or permitted such a person to occupy those premises for residential purposes, whether continuously or intermittently, except that this subsection shall not apply to a person who harbors or permits a juvenile to occupy the premises if the juvenile has been adjudicated delinquent upon the basis of an act which if committed by an adult would constitute the offense of use or possession under the said "Comprehensive Drug Reform Act of 1987."

q. The person has been convicted of or pleaded guilty to, or if a juvenile, has been adjudicated delinquent on the basis of an act which if committed by an adult would constitute an offense under N.J.S.2C:20-1 et al. involving theft of property from the landlord, the leased premises or other tenants residing in the same building or complex; or, being the tenant or lessee of such leased premises, knowingly harbors therein a person who has been so convicted or has so pleaded, or otherwise permits such a person to occupy those premises for residential purposes, whether continuously or intermittently.

r. The person is found in a civil action, by a preponderance of the evidence, to have committed a violation of the human trafficking provisions set forth in section 1 of P.L.2005, c.77 (C.2C:13-8) within or upon the leased premises or the building or complex of buildings and land appurtenant thereto, or the mobile home park, in which those premises are located; or, being the tenant or lessee of such leased premises, knowingly harbors or harbored therein a person who has been engaged in human trafficking, or otherwise permits or permitted such a person to occupy those premises for residential purposes, whether continuously or intermittently. No action for removal may be brought pursuant to this subsection more than two years after the alleged violation has terminated. A criminal conviction or a guilty plea to a crime of human trafficking under section 1 of P.L.2005, c.77 (C.2C:13-8) shall be considered prima facie evidence of civil liability under this subsection.

For purposes of this section [,] :

(1) "developmental disability" means any disability which is defined as such pursuant to section 3 of P.L.1977, c.82 (C.30:6D-3);

(2) "member of the immediate family" means a person's spouse, parent, child or sibling, or a spouse, parent, child or sibling of any of them; [and]

(3) "permanently" occupies or occupied means that the occupant maintains no other domicile at which the occupant votes, pays rent or property taxes or at which rent or property taxes are paid on the occupant's behalf; and

(4) "recurring fee" means the same as the term is defined pursuant to section 1 of P.L. , c. (C. ) (pending before the Legislature as this bill).

(cf: P.L.2013, c.51, s.7)

3. This act shall take effect immediately.

STATEMENT

This bill sets a 10 percent limit on an increase in recurring fees charged by a landlord to a residential tenant.

Specifically, this bill prohibits a landlord from, over the course of a 12-month period, increasing the recurring fees, whether severally or in the aggregate, on a rental unit by more than 10 percent over the amount charged during the preceding 12-month period. The bill defines the term "recurring fee" to mean fees and costs chargeable to a residential tenant pursuant to or supplementing a lease, which are not included in the base rent. The bill specifies that a "recurring fee" is to include, but not be limited to, fees for amenities, pets, parking, convenience charges, charges incorporated into the costs of paying the monthly rent such as credit card fees, or other similar costs chargeable on a recurring basis, or related to charges that occur on a recurring basis, to a tenant.

The bill prohibits a tenant from entering into a sublease in violation of the bill’s recurring fee limit. A landlord is permitted by the bill to establish an initial recurring fee rate for a new tenancy in which no tenant from the preceding tenancy remains in lawful possession of the rental unit, while the bill’s prohibition is only to apply to subsequent increases after that initial recurring fee rate has been established with respect to the new tenancy.

As a result of a landlord’s violation of the bill:

(1) the maximum amount of recurring fees chargeable to the tenant for the duration of the present lease or agreement term is to be the recurring fee for the rental term preceding the increase in violation of the bill;

(2) the landlord is to be liable for a penalty of $1,000 per violation per unit, collected and enforced by the Commissioner of Community Affairs or the Attorney General;

(3) a tenant is permitted to petition a court to terminate a lease or agreement between the tenant and landlord, which shall terminate all obligations under the lease;

(4) the landlord is subject, at the discretion of the tenant, to a separate cause of action by the tenant, who is permitted to recover $1,000 from the landlord, in addition to reasonable attorney’s fees or expenses, court costs, expenses for expert witnesses, and other expenses incurred in proving a violation of the bill; and

(5) the landlord is subject to the penalties in the bill for each violation against each tenant, and the imposition of a penalty pursuant to any provision of the bill is not to prevent the imposition of a penalty pursuant to a different provision of the bill or any other provision of law including the New Jersey consumer fraud act, P.L.1960, c.39 (C.56:8-1 et seq.).

The bill provides that the bill’s requirements: are to function in addition to, and not in place of, the existing prohibition on unconscionable rent increases; are not to be construed to interfere with or impede a lease agreement between a landlord and tenant for which recurring fees are characterized as rent or additional rent; are not to be construed to prohibit or otherwise impair a landlord’s ability to commence an eviction action; and are to function only to limit the ability of a landlord to increase the amount of recurring fees beyond the authorized amount set forth in the bill.

The bill also amends the Anti-Eviction Act, P.L.1974, c.49 (C.2A:18-61.1 et seq.) to specify that a violation of the bill is to constitute an unconscionable rent increase, which is a jurisdictional bar to an eviction action.

The bill would take effect immediately.